31st Jan 2011 08:18
28 January 2011
Clean Energy Brazil PLC
("CEB" or the "Company")
Consolidated interim financial statementsfor the six months ended 31 October 2010
Clean Energy Brazil PLC, an investment company focused on Brazil's sugar cane/ethanol industry, is pleased to announce its results for the six months ended 31 October 2010.
Further enquiries:
Singer Capital Markets (Nominated Adviser) Claes Spang | Tel: +44 (0) 203 205 7500 |
IOMA Fund & Investment Management Limited (Administrator) Philip Scales | Tel: +44 (0) 1624 681250 |
Chairman's Statement
Dear Shareholders,
The Company's NAV decreased to US$34.4 million (23 US cents per share) as at 31 October 2010 from US$41.6 million (28 US cents per share) as at 30 April 2010. The decrease in net asset value is primarily a result of our changed estimate of the value of our investment in Unialco MS. Our assets remain the same as they were six months ago: cash and our investment in Unialco MS.
As I mentioned in my last statement, we have received a purported claim by Unialco SA in connection with our investment in Unialco MS. That claim would fall under the investment agreement we entered into at the time the investment was made. The investment agreement is governed under English law. We have consequently retained UK counsel. They have reviewed the underlying facts, and we have made our own demands in connection with Unialco SA's failure to fulfil its obligations, in particular to make the required investment in the Dourados project. This legal manoeuvring is still in its initial stages and it would be premature to predict the outcome.
At the same time, we continue our negotiations to sell our stake in Unialco. Our running costs are low. We have eliminated all non-essential expenses and have essentially outsourced all required services. We will continue to endeavour to obtain fair value for our investment.
Respectfully yours,
Jossef Barath
Chairman
28 January 2011
Independent Review Report To Clean Energy Brazil Plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 31 October 2010 which comprises Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.
As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with IAS 34 Interim Financial Reporting.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly report for the six months ended 31 October 2010 is not prepared, in all material respects, in accordance with IAS 34 and the AIM Rules.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man
IM99 1HN
28 January 2011
Consolidated Statement of Comprehensive IncomeFor the six months ended 31 October 2010
(Unaudited) | (Unaudited) | (Audited) | ||
Note | 6 Months ended 31 October 2010 | 6 Months ended 31 October 2009 | 12 Months ended 30 April 2010 | |
$'000 | $'000 | $'000 | ||
Interest income on bank balances | 70 | 130 | 292 | |
Sundry income | 77 | 6 | 16 | |
Fair value movement on revaluation of investments | 7 | (5,843) | 10,207 | (2,015) |
Fair value movement on agricultural assets | - | (137) | (1,164) | |
Loss from cane sales | - | (395) | (170) | |
Gain on disposal of agricultural assets | 21 | - | - | |
Investment expense | - | (1,689) | (1,689) | |
Cancellation of operating leases of land | - | - | (1,492) | |
Net investment (expense)/income | (5,675) | 8,122 | ( 6,222) | |
Provision for potential claim | - | - | (6,880) | |
Other administration fees and expenses | (1,340) | (3,876) | (5,858) | |
Total administrative expenses | (1,340) | (3,876) | (12,738) | |
Foreign exchange gain | 202 | 1,209 | 127 | |
Finance costs | (5) | (13) | (35) | |
(Loss)/profit for the period before tax | (6,818) | 5,442 | (18,868) | |
Taxation | (36) | (125) | (239) | |
(Loss)/profit for the period after tax | (6,854) | 5,317 | (19,107) | |
Other comprehensive (loss)/income |
(339) |
2,461 |
3,464 | |
Total comprehensive (loss)/income for the period |
(7,193) |
7,778 |
(15,643) | |
Basic and diluted (loss)/earnings per share | ($0.05) | $0.04 | $(0.13) |
Consolidated Statement of Financial PositionAt 31 October 2010
(Unaudited) | (Unaudited) | (Audited) | ||
Note | 31 October 2010 | 31 October 2009 | 30 April 2010 | |
$'000 | $'000 | $'000 | ||
Non-current assets | ||||
Investments at fair value through profit or loss | 7 | 20,068 | 38,133 | 25,911 |
Property, plant and equipment | 50 | 142 | 133 | |
Total non-current assets | 20,118 | 38,275 | 26,044 | |
Current assets | ||||
Trade and other receivables | 1,007 | 4,405 | 468 | |
Agricultural assets | - | 2,283 | 2,616 | |
Cash and cash equivalents | 20,678 | 23,443 | 20,079 | |
Total current assets | 21,685 | 30,131 | 23,163 | |
Total assets | 41,803 | 68,406 | 49,207 | |
Current liabilities | ||||
Provision for potential claim | 10 | (6,880) | - | (6,880) |
Trade and other payables | (490) | (3,359) | (701) | |
Total liabilities | (7,370) | (3,359) | (7,581) | |
Net assets | 34,433 | 65,047 | 41,626 | |
Equity: | ||||
Share capital | 8 | 2,920 | 2,920 | 2,920 |
Share premium | - | 82,584 | - | |
Distributable reserves | 29,568 | (21,738) | 36,422 | |
Other reserves | 1,945 | 1,281 | 2,284 | |
Total equity | 34,433 | 65,047 | 41,626 | |
Net Asset Value per share ($) | 9 | 0.23 | 0.44 | 0.28 |
Consolidated Statement of Changes in EquityFor the six months ended 31 October 2010
Share capital | Share premium | Distributable reserves | Other reserves | Shareholders' funds | |
$'000 | $'000 | $'000 | $'000 | $'000 | |
Changes in equity for period ended31 October 2009 (unaudited)
| |||||
Balance at 1 May 2009 | 2,920 | 82,584 | (27,055) | (1,180) | 57,269 |
Profit for the period | - | - | 5,317 | - | 5,317 |
Other comprehensive income | |||||
Foreign exchange gainon translation of subsidiaries | - |
- | - | 2,461 | 2,461 |
Balance at 31 October 2009 | 2,920 | 82,584 | (21,738) | 1,281 | 65,047 |
Changes in equity for year to30 April 2010 (audited)
| |||||
Balance at 1 May 2009 | 2,920 | 82,584 | (27,055) | (1,180) | 57,269 |
Loss for the year | - | - | (19,107) | - | (19,107) |
Other comprehensive income | |||||
Foreign exchange gainon translation of subsidiaries | - |
- | - | 3,464 | 3,464 |
Transactions with owners recorded directly in equity | |||||
Cancellation of share premium | - | (82,584) | 82,584 | - | - |
Balance at 30 April 2010 | 2,920 | - | 36,422 | 2,284 | 41,626 |
Changes in equity for period ended 31 October 2010 (unaudited)
| |||||
Balance as at 1 May 2010 | 2,920 | - | 36,422 | 2,284 | 41,626 |
Loss for the period | - | - | ((6,854) | - | (6,854) |
Other comprehensive loss | |||||
Foreign exchange ontranslation of subsidiaries | - | - | - | (339) | (339) |
Balance at 31 October 2010 | 2,920 | - | 29,568 | 1,945 | 34,433 |
Consolidated Statement of Cash FlowsFor the six months ended 31 October 2010
(Unaudited) | (Unaudited) | (Audited) | |||
6 Months ended 31 October 2010 | 6 Months ended 31 October 2009 | 12 Months ended 30 April 2010 | |||
$'000 | $'000 | $'000 | |||
Cash flows from operating activities | |||||
(Loss)/profit for the period after tax | (6,854) | 5,317 | (19,107) | ||
Adjustments for: | |||||
Fair value adjustment | 5,843 | (10,070) | 3,179 | ||
Finance income and expense | (267) | (1,326) | (384) | ||
Tax paid | 36 | 125 | 239 | ||
Profit on disposal of agricultural assets | (21) | - | - | ||
Depreciation of fixed assets | 8 | 9 | 20 | ||
Changes in working capital | |||||
Change in trade and other receivables | 50 | (3,696) | 241 | ||
Change in agricultural assets | - | 576 | 244 | ||
Change in provision for potential claim | - | - | 6,880 | ||
Change in trade and other payables | (248) | 2,574 | (67) | ||
Net cash flows used in operations | (1,453) | (6,491) | (8,755) | ||
Cash flows from investing activities | |||||
Interest income | 70 | 130 | 292 | ||
Disposal of agricultural assets | 2,123 | ||||
Disposal of fixed assets | - | 55 | 67 | ||
Purchase of fixed assets | - | - | (14) | ||
Net cash flows generated from investing activities | 2,193 | 185 | 345 | ||
Cash flows from financing activities | |||||
Interest expense and other finance costs | (5) | (13) | (35) | ||
Net cash flows used in financing activities | (5) | (13) | (35) | ||
Net increase/(decrease) in cash and cash equivalents | 735 | (6,319) | (8,445) | ||
Effect of exchange rate fluctuations on cash balances | (136) | 3,169 | 1,931 | ||
Cash and cash equivalents at start of period | 20,079 | 26,593 | 26,593 | ||
Cash and cash equivalents at end of period | 20,678 | 23,443 | 20,079 | ||
Selected notes to the condensed consolidated interim financial informationFor the six months ended 31 October 2010
1. General information
The Company is a closed-end investment company incorporated on 19 September 2006 in the Isle of Man as a public limited company. The address of its registered office is IOMA House, Hope Street, Douglas, Isle of Man.
The Company is listed on the AIM market of the London Stock Exchange.
The condensed consolidated financial information comprises the results of the Company and its subsidiaries (together referred to as the "Group") and is unaudited.
The consolidated financial statements of the Group as at and for the year ended 30 April 2010 are available upon request from the Company's registered office at IOMA House, Hope Street, Douglas, Isle of Man or at www.cleanenergybrazil.com.
2. Statement of Compliance
These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the period ended 30 April 2010.
These interim consolidated financial statements were approved by the Board of Directors on 28 January 2010.
3. Significant accounting policies
The accounting policies applied by the Group in these interim consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 April 2010.
4. Critical accounting estimates and assumptions
The preparation of condensed consolidated interim financial statements in conformity with IFRSs requires management to make judgements, estimates, and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results for which form the basis of making the judgements about carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates.
In preparing these condensed consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at end for the year ended 30 April 2010.
5. Financial risk management policies
The principal risks and uncertainties are consistent with those disclosed in preparation of the Group's annual financial statements for the year ended 30 April 2010.
6. (Loss)/earnings per share
The basic and diluted (loss)/earnings per share is calculated by dividing the (loss)/profit for the period attributable to ordinary shareholders by the weighted average number of shares outstanding during the period:
6 months ended31 October 2010 (unaudited) | 6 months ended31 October 2009 (unaudited) | year ended30 April 2010 (audited) | |
(Loss)/earnings attributable to ordinary shareholders of the Company |
$(6,854,000) |
$5,317,000 |
$(19,107,000) |
Weighted average number of shares in issue | 147,563,929 | 147,563,929 | 147,563,929 |
Basic (loss)/earnings per share (cent) | (4.6) | 3.6 | (12.9) |
There is no difference between fully diluted loss/earnings per share and basic earnings per share.
7. Investments
Investments at the period end comprise one holding as follows:
Name | Country of Incorporation | Proportion of ownership interest |
Unialco MS Participaçoes SA | Brazil | 33% |
The investment is considered to be a joint venture. However it is not equity accounted for, but designated as held at fair value through profit or loss in accordance with a permitted exemption under IAS 31. The investment in Unialco is stated at fair value, as estimated by the Directors.
Unialco | |
$'000 | |
Balance at 30 April 2010 | 25,911 |
Fair value adjustment | (5,843) |
Balance at 31 October 2010 | 20,068 |
8. Share capital
Ordinary shares of 1pence each As at 31 October 2010 and 30 April 2010 | Number of shares | Value £'000 |
Issued | 147,563,929 | 1,475 |
Authorised | 600,000,000 | 6,000 |
All shares are fully paid and each ordinary share carries one vote.
In addition to the ordinary shares, 25,000,000 equity warrants are admitted to trading on the AIM market. Each warrant entitles the holder to subscribe for one new ordinary share at £1.00 per share, subject to adjustment as detailed in the Company's Admission Document published in December 2006.
9. Net asset value (NAV)
The NAV per share is calculated by dividing the net assets attributable to the equity holders of the Company at the end of the period by the number of shares in issue.
31 October 2010 | 31 October 2009 | 30 April 2010 | |
Net assets | $34,433,000 | $65,047,000 | $41,626,000 |
Number of shares in issue | 147,563,929 | 147,563,929 | 147,563,929 |
NAV per share | $0.23 | $0.44 | $0.28 |
10. Provision
In the financial statements for the year ended 30 April 2010, a provision was made for a potential claim against Clean Energy Brazil Limited ("CEBL"), pursuant to an investment agreement dated 10 December 2007 made between Unialco MS Participações S/A, CEBL, Unialco S/A -Álcool e Açúcar, and others relating to Unialco MS Participações S/A. The provision has been retained for the current period, but the Company intends to vigorously defend against any claim in this matter.
11. Subsequent events
In December 2010, CEBL issued a letter before action seeking compensation of $36.55 million in respect of its investment in Unialco MS.
Related Shares:
ADV.L